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tv   [untitled]    June 19, 2012 7:00pm-7:30pm EDT

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>> and also the decline of unions, whether or not that factors in. a quarter said they do see that as factoring in a lot. >> yeah, and you see that that's far lower than those other responses, and can you see that unions are having a rough time of it this year. in wisconsin they were dealt a really serious defeat by trying to recall the government who had pushed back on unions and so, you know, union support came in literally half of the support for -- half blamed union decline compared to competition from abroad. >> shane goldmacher, "national journal" is looking at epa regulation of greenhouse gases. why right now and what do americans think about it? >> this is a big issue. there's a federal court case coming up. the epa is looking at dealing with greenhouse gases and to deal with climate change. so should congress let epa deal with this, or should they intervene and stop them, and pretty resoundingly 55% said yes, the epa should be allowed
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to make new rules to curb greenhouse gas emissions, and so that -- that's, you know, one part of the coin. the second, we asked a second question. there's a more detailed issue coming up with how to handle pollution and mercury issues at nuclear power plants, and so, again, this question should the congress intervene on this issue, and so we gave the response of the poll three options, one is what the business community wants is let's halt these rules because it could cause increased prices in electricity, could cause rolling blackouts. the second option was what environmentalists want which is just put the rule in place. this is necessary for public health and the public really took the third choice which is, yes, we should keep this rule, but what we really need to do is make more times to make sure that the companies and the businesses can implement the rule without increasing electricity costs or causing blackouts or any of those negative impacts. >> shane goldmacher, thank you so much for talking with us. we've been looking at "national journal's" latest congressional connection poll.
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shane goldmacher is a congressional correspondent. we appreciate your time. >> thank you. tomorrow on "washington journal," "fortune" magazine editor at large peter el kind has written about mf global as part of a six-month investigation of the investment company, including the collapse of the firm, it impact on the financial sector and the role played by ceo jon corzine, the former governor of new jersey. can you read this story linked on our website before tomorrow's segment. peter el kind takes your calls, e-mails and tweets at 9:15 eastern on c-span's "washington journal" as part of our spotlight on magazine series. next month award-winning author and historian david pietrusza is our guest on "in-depth," his passion for american presidents and great american pastime, baseball, has resulted in a dozen books, including "1920, the year of the six presidents," "1960, lbj versus jfk versus nixon" and "rothstein" about the fixing of
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the 1919 world series. join us live with your calls, e-mails and tweets for david pietrusza on sunday, july 1st for "in-depth" on c-span 2. now a discussion on wind energy development and the production tax credit or ptc which gives wind farms a credit of 2.2 cents per kilowatt hour of energy produced. et credit expires at the end of the year. the atlantic hosted this one-hour forum. >> martin clemper, co-head of the infrastructure project, and then we have will est kempton, of carbon-free and steve clemons, senior vice president of development of nextera energy resources. maybe i should have put that, too. i know he's out there looking at what works and what doesn't.
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we're going to talk for just a little bit ourselves and then open to all of you for a broader set of questions. and i come at this as a lay person, but i did -- i do have some images. wind part of this. whenever i'm discussing this subject, i wonder why i'm discussing it. am i discussing it because it's politically correct to do so? or is there a real viable energy option here you? know, what's the difference between doing something that sounds good and feels good and then the reals dollars and cents of making a practical new diversified energy side? i had a session once with ted turner who told me that he was the biggest landowner in the united states, and he wanted to put wind farms -- wind farms and buffalo. he was really into buffalo, and he was really into wind farms, but absence of a national grid and various other problems made it impractical to do so, but it is an obsession of his. there may be some people from the u.n. foundation here who have talked to ted since i have, but he was very steamy about it one time.
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so let me just open the discussion, and i'm going to start with michael who has -- if i understand it correctly, your firm, which is invested heavily across an energy spectrum nonetheless participates and has about 20% of the wind energy market in the united states, so why don't i ask you to start. are we discussing this because it's politically correct to do so, or do you think that there's a real profit in there somewhere? >> well, as we -- in the next year or two, we're going to approach 20 billion cumulatively in the last 20 years invested in wind and solar. the first and primary reason we got into wind and solar investment was just to constrain the discussion that happened momentarily. a few years ago a former vice president gave a speech at the oscars and suddenly renewable energy became mainstream media attention and then it became good public policy to become a company investing in renewable energy but our first and foremost reason for getting into
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it has been our fiduciary responsibility to our shareholders. we've invested billions and billions of dollars in wind energy and the last few year, next quite a few years, quite a bit into utility scale solar which is different from rooftop solar which is a separate discussion, but we continue to invest, and it's a good product for our customers. our customers are happy buying it. in six, eight or ten states in this country it's economically prudent for them to buy, it even at today's low gas prices, with the federal subsidies that have been in place almost continuously the last eight to ten years, but as you go away from those six, eight or ten states, wind energy has a different economic equation for the user, and solar energy is at the utility scale is largely an economic choice in three to five states. there are smart places to do both of these and less smart to do both of these, and i'm sure we'll get into some of that today. >> tell us about this. you were quoted in 2013 saying
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there would be no wind generators -- no wind centers built in the united states if the federal government didn't get its act together on the tax incentive. can you expand on that a bit? >> yeah. you have two -- you have a dynamic where efficient wind energy, if it's measured by price, today with the technology advancements we've seen, technological advancements we've seen in the last two or three year, massive ones in the last two or three year, price declines in the equipment due to various forces at play and the global financial and technical markets, we brought the wind subsidy back to the range where it was three or five years ago. it had gotten into 8 cents on the windy spots of the country and on the left and west coast higher than that because of poor wind regimes and now we're in the dynamic where the subsidy goes away and the three-cent price point because a five cent price point.
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for those of you that pay with pre-tax money in your life, you know the difference between paying with pre-tax dollars above the line or after the bottom line, or after tax dollars so that's an effective two to three-cent increase the customer would have to pay. so the point that i've made a few times in recent months is what customer do you know would suddenly voluntarily agree that they are buying a lot of it now to pay me or somebody that looks like me a year from now double the price? i don't think there's that much political correctness in our country nor do i think going forward there will be that much. >> thank you. martin, it's interesting. i was doing some digging own and found you were the project finance lawyer of the year in some distinguished magazine here just last year and looked at you did an arranged project financing for sports stadiums, arenas, sports teams, and, you know, basically your day job and maybe on the evenings and weekends you were doing energy and the renewable energy.
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are there similarities between what you see as this industry and the renewable energy sector and what you've done with other large projects, and what are your reflections as you've gotten into this, because i can just tell by your profile you've been in the project financial arriba for a time and coming back to my core question which is to kick the tires of how serious wind is as an energy option and a viable business option. how do you see it? >> probably 90% of what i spend my time on is energy, and in 2011 we were involved in almost $10 billion worth of renewable energy financings. it would be fun to be doing $10 billion worth of sports stadiums financings, but there aren't that many in the country. the perks from sports are a lot more fun, but not as many people are as interested as looking at a bunch of wind turbines sitting out there on the field or a bunch of solar panels, but that's truly where the biggest capital investment is, and quite frankly that's the area where i
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feel you can make the biggest difference for our country. as michael has said, they have invested almost $20 billion. the industry has invested probably close to $200 billion in wind. they wouldn't have done that if it wasn't economic, if it wasn't productive. utilities wouldn't be buying that power. the same thing is true of solar energy. last year's result of a federal department of energy loan guarantee prom that has gotten a little bit of publicity. the federal government helped finance close to $20 billion worth of renewables, and those are projects in the long run that are going to help scale up the industry in something like solar, the price of solar modules has gone from $4 a watt to something under $1 a watt, and that's just in the last probably two years. part of that is because of the scale up in the industry. the same thing i think mike has mentioned has happened in the wind industry. the cost of wind power has been
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reduced significantly, and ultimately that's a way to help our country become more energy independent. >> one hears about the cost factors going down, but when we came into -- when the obama administration came in three and a half years ago and president obama's talking about green jobs and talking about solar, at that time china had about 5% of the solar panel production capacity of the world. today if you take taiwan it's at 70%, so it doesn't look like the -- at least the administration made very much headway. maybe people blame chinese subsidies, but it raises the question of whether or not, even if you had a president of the united states a clear need and desire to move into renewable energy sector, why do you think -- i know this is a wind panel, but let's just take as an example the united states lost the battle on solar, and mike may disagree we lost the battle. but the numbers don't look good. >> i would say we didn't lose the battle either. i think that the largest solar
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projects in the world are currently being built in the united states. there are two 550-megawatt projects currently under construction. make's company is an owner of one of those projects. those projects will help prove the viability of low-cost pv solar. some of the largest solar thermal projects in the world are being built in the united states right now. also as a result of part of the government program, so when you talk about the pv industry in taiwan or china, you're talking about solar modules manufacturing. you're not necessarily talking about the installation of the equipment. there are a lot of jobs that are involved in the construction and as the price of solar comes down, i think the u.s. manufacturing capacity will increase as well. >> well, jumping back to wind. you're an engineer at university of delaware. you've been working on this for a while. i was intrigued with the project where you basically tried to deal with one of the big problems of wind which is the variability, and i suppose the
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storage and linked a lot of offshore sites. maybe you can tell us a little bit about that and also reflect on what some of the real weaknesses have been in the ability to get large-scale wind energy production. >> let me take the second one first. i think it's a matter of ramp up rather than weakness of ability to move. earlier the speaker mentioned 4% of production is now wind, but if you look at the pjmq which is the power operator in this area, over half of the new generation that's proposed is wind. now, will that all get built? depends a lot on tax incentives and other policies and the q always has a more optimistic forecast, but wind is moving very quickly under the current policy environment. which, as we've noted, may change. on the leveling of wind, wind is considered to be weak or unable to become a large part of
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generation because it fluctuates with the speed of wind ridding the turbines. i think that's -- that problem is a bit exaggerated. i was in denmark in the fall on -- on sabbatical which does not mean vacation. it means you're working with different people, and -- and they are running, you know, 22% of the whole country's production from wind, and at times it's up to 60% and 70%, so it's certainly possible to do a lot more, but the key is transmission and maybe storage. people think of storage as the main solution, but the project that we did that you referred to, steve, is that we looked at the atlantic offshore wind resource and asked suppose you had wind generation spread out along the atlantic coast rather than in one location. in one location the wind fluctuates a lot. so we modeled a long distance
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transmission line, high-voltage direct current, going from maine to florida, which is not something you'd practically build in one shot at least, but we wanted to understand how transmission could affect wind intermittensy, and we had 11 sites along that route, and in four years of data, the wind never stopped. it fluctuated, but it fluctuated around 30%, 40% capacity, not all over the place, and liter literally it was not an intermittent resource anymore, so it's just one direction, but it's -- it was meet logically organized so the way storms moved is the way the transmission line moved, and it illustrates that you don't necessarily need a lot of storage. you need to combine a lot of transmission with a little bit of storage to get a leveling of wind fluctuations. >> this sounds like a large degree of infrastructure investment that might solve problems, and i don't know if the model that i had heard from ted turner is still appropriate
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or not, but when you then talk about grids, you're talking about investment. it does make me ponder somewhat the current policy debate about whether the united states at the national and also state level is investing enough in infrastructure, what the projects look like that would partner well with private industry and what those balances should be. mike, back to you for a second. what do you think, if you were to see, even from -- from your own mercantile perspective, what would be in the public interest as you see it for the government to invest and beyond incentives and in infrastructure? >> that's a loaded question. >> c-span is running. >> yeah, yeah. i believe from an infrastructure you've got to look at the country as really, with all due respect to hawaii and alaska, from a grid point of view and not being logically interconnect al. you have 48 different countries, and most people that look at the u.s. electric grid fail to see that because you don't deal with it every day like some of us that have been in it for 30
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years, and each state wants to have its own policy and often does. georgia doesn't talk to alabama too much. florida doesn't talk to georgia. north carolina barely speaks to south carolina, on electric issues. and when you try to have an infrastructure discussion on transmission and try to coordinate all of those things and then i believe my colleague joe kelleher once told me there's over 500 utilities in the united states that own some piece of the transmission grid, we can't get 537 people that get elected to office in this city to talk to each other. can you imagine how hard it is to get 500 different companies to find a common interest? there's probably very little common denominator when you've got 500 utilities talking on the whole scale of the country. so what you want to start doing investment in infrastructure, it's a very state-by-state, sometimes at best a regional discussion. wind in general makes a lot of sense in the six, eight or ten states in the center part of the country. rural by nature. robust resource.
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therefore, cost efficient for all of the above discussions that i think the governor was talking about a little bit earlier of the as you start to move that to other places or want a desire to put wind elsewhere, we get back to what we call in our office orange juice discuss. we have a lot of orange groves to create orange juice where i'm from. maybe pay "x" dollars a gallon or half gallon in the supermarket. if any of you are from north dakota or even new jersey or maryland up in this area, think what orange juice would cost if you had to grow the orange tree here. would you buy it? not a lot of people would rush to buy orange juice if it had to be grown locally in north dakota or maine or places like that, right? same with wind energy. wind energy makes a lot of sense in several states in our country, but then you have to bring the infrastructure to distribute that commodity or product which often is transmission. then you get into the 48 different countries, the federal government's role, the permitting, the logistics. the construction is the easy part. technology is known.
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it's understood. everybody knows what it's going to cost. it's the decades it takes to permit large infrastructure. moving electricity around the country is not the same as moving oil and gas. it's not a pressurized dynamic. the physics and the engineering behind it are very different and how we move natural gas and oil and other commodities or liquid-based commodities around this country. not like the interstate highway system where we have a shared infrastructure amongst all the state and pay for it in a political and local way through gasoline tax revenues. the infrastructure and electric grid is quite different. it was built decades ago with central station and radio feed to rural areas. now we're building rural wind farms or rural solar facilities, utility scale that matter talked about a moment ago, and then we have generally new generation, anything built in the last 20 or 30 years and this country has not been built in the city centers. now we're trying to bring that power back in and see everybody that used to drive six-lane interstate highways out on to the two-lane farm roads that are
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out in rural america. you can't start putting all the heavy truck traffic on 270 or the beltway here here on rural roads in north dakota. traffic is not going to handle, it so the transmission piece of it, the engineering behind it, the physics behind it, are quite different. you can't control electricity the same way you can control natural gas or fluids. >> marty, do you have a comment on this? >> yeah. the administration supported giving jurisdiction to help solve the problem which is like the 48-state problem, and in fact, in waxman/markey passed by the house i guess two and a half years ago now, there were provisions that gave specific authorization to try to overcome some of the barriers that exist between states in order to build transmission. as mike said. no question transmission is a critical piece of being able to build at or renewable energy capacity within the country. some states have done a lot better than others internally, a
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state like california has done a pretty good job. texas has done a pretty good job of being able to recognize of innocenting the utilities to be able to build the transmission. looking at federal policies, we need to go back to the kind of provision in waxman/markey because that would open the grid and offshore is also going to face the same problem because offshore wind, which is potentially very significant also has to deal with the transmission to get that power back into the loads market. >> is there much public awareness of this disparity in states? it reminds me a jeer ago jerry brown and i were in a panel with some folks from first solar and solar city. no wind people in, that unfortunately, but they were discussing brown's target of generating i think it's 20% locally distributed energy by 2020 or something, and it creates a huge shift, and -- and
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looking at how you achieve it, and one of the guys made the comment that if you lack across counties inside california, each of these counties has wildly different attitudes and postures towards solar installation and facilities at homes and roof tops and whatever it may be, so the permitting creates enormous barriers depending where you're at. it reminded me that the world bank publishes a study doing studies around the world and compare countries and go line by line and compare countries. an uplifting effect on some countries that are laggards, and i'm wondering why or perhaps next year they are on their way to do it, there might not be some benefit to publishing the very disparate environments between states so it becomes much more a republic deal. >> well, we -- we have this thing called shareholders we're concerned about, so when we figure those kind of things out we keep it to the goodness of our shareholders from a competitive point of view, but we do look at states almost as
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if they are countries, from a public policy point of view inside the federal context of the regulatory regime that we have here that's set at the federal level and one of the most confusing things to most folks and see it from competitors that come from europe and asia, when they come to this country and compete with us in renewables, they misunderstood the federal/state dynamic of how electricity is regulated in this country. as marty said there's a great tool out there. very few people want to see that tool be used and very few people want to step out and do interstate transmission across regions and be the first one to do these grand plans because that takes a lot of time and a lot of money and a lot of effort and a lot of political permitting and regulatory things they have to solve for for years and years. and when you get into those business decisions, they are complex and from our point of view we look at wind and solar to a certain extent. try to pick places where it makes sense, back to my orange jaws analogy a little bit
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earlier, but also where the customer demand serbs and customer demand is driven by public policy at the state level, and if there is any wind built after this year, it will be from rps programs at the state level that drive that. we happen to think it a that will be some wind, but next year close to zero largely because everybody's got to sit on their hands and wait and see what happens with federal policy and then the two, three or four years after that you may see some small amount of wind built in the country if btcs never come back, assuming the status quo and gas prices. electricity prices stay where they are at, but state level rps demand, which is public policy at the state level, may drive some wind demand, but it will be relatively small compared to what we've seen in the last five or ten years in the united states. >> will, our the optimist but you're also the better position to think about the public policy and deficits. the public doesn't know there this but you're not only working on the engineering of wind and
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connectivity but you've been working with the university of delaware on the electric cars to grid challenges. do you think there are things that the u.s. government needs to do more robustly than it has been or that states need to do, and what would that be, and, again, coming back to what mike talked about, is there some benefit? perhaps your center should be the one to create the annual report, you know, on state reticence in renewables? >> i agree. i think rps state regulations for renewables are very important and drive things independently of price. i think the price issue is not quite as straightforward as just, you know, is it three cents or six cents because, of course, in addition to the rps, we're looking at prices today. when you talk about three versus six or eight or ten cents, that's based on natural gas prices today, and some people think today's natural gas prices will stay the same for a decade or a millenup. i'm not sure how big that number
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is for the gas optimist. but the -- the public utility commissions and the utilities want a diverse portfolio. they don't want all one fuel because they have been burned way too many times with the cost of the fuel going up when they didn't expect it, when the analyst said it wasn't going to go up, so there's going to be some wind for that reason as well. of course, wind is a perfect hedge against fuel increases because you know the fuel cost of wind or solar is never going to increase. i guess addressing your question about the -- the automobile storage, right. our university of delaware has done a good bit of research on looking at electric cars as a storage resource for the grid. that's been financed by companies and also the federal government, so we're getting ready to roll out a commercial program with several industrial
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partners probably in the fall, but the idea there is to use the batteries in electric vehicles as a -- as a grid resource. so you can level out fluctuations, whether they are four-secretary fluctuations in the ancillary services market or longer fluctuations in wind excess where you absorb. so that's called a vehicle-to-grid technology. >> let me ask you guys just about the energy of this. again, i travel around the world and go to china a lot, and i see china investing in everything. i mean, developing everything, and i have no hope at all that china is actually going to really become greener, you know, have great, highly sophisticated natural gas facilities that it's restoring and putting in place of, you know, horrible coal plants but we'll also have the coal plants, it will have wind, obviously solar, but i get the sense from the three of you, and you're so each of you very
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embedded that you're largely optimistic about u.s. investment infrastructure, if the incentives stay in place, this will growth. but i don't get this sense from you that this is a hair on fire issue for the united states, and what i mean by that is when you go to china, you feel the pullsating need for demand, for action, for civil society. you feel the tectonics of, you know, an energy earthquake happening, if you will. i don't get that sense, at least right now, in talking about wind. i get a sense that it's stable and sound. it's here to stay. it will be incremental, and i'm wondering if i have the right impression. >> well, in wind in china, i forget the number, but reliable ports say about a third of it or 25% of it is not even connected to the grid. >> right. >> okay. so you have a public policy and nationalistic construction program that's going on that's kind of ahead of itself, right? >> wind to nowhere. >> wind to nowhere. >> it meet the five-year plan. >> meets the five-year plan. >> somebody ought to be tweeting wind to nowhere in china.
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>> right. >> and then you have another dynamic. they are building, i forget the number, maybe it's 50,000 or 100,000 megawatts of capacity a year of new capacity because of the growth of their economy. it's a giant number and been going on tore 10 or 15 years, if not longer. in our country we have a million megawatts of installed capacity. wind is 50 megawatts so 4% of the energy after you annualize it. after this year's big build it will be about 4% of the energy. you have a country here where we already have a giant infrastructure that we built, paid for and have various business and political decisions that create it over many decades. theirs is getting created to catch up or to meet that demamptd i think some of that dynamic you're describing is equivalent of what our chairman used to use, the analogy and editorial he once wrote, the growing or 15 or 16-year-old teenager that needs a lot of calories to keep growing and participate in class and become a vibrant adult versus the healthy 40 or 50-year-old adul


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